Blends of polyamide 12 (PA12) and isotactic polypropylene (PP) were prepared by melt mixing in an internal mixer in presence and absence of compatibilisers. The compatibiliser used was maleic anhydride functionalised polypropylene (PP-g-MA). Effect of compatibilisation on the blends has been evaluated from the morphological parameters derived from scanning electron micrographs (SEM) of cryogenically fractured and extracted surfaces of the specimens. The uncompatibilised blends showed two-phase unstable morphology due to high interfacial tension and coalescence effects in the absence of favourable interactions at interface between the individual phases. Incompatibility increased as the concentration of dispersed phase in the blend increased. Compatibilisation stabilised the morphology by reducing the particle size as well as interparticle distance and enhancing the interfacial area and interface adhesion. A critical concentration of compatibiliser required for effective compatibilisation (CMC) was observed beyond which there was no net improvement in interfacial properties and was considered as the point of interfacial saturation. Experimental results were compared with the compatibilisation theories of Noolandi and Hong and Leibler and based on the calculated average interfacial area occupied per compatibiliser molecule it was concluded that the molecular state of compatibiliser at interface changed with concentration. It was supported by the rate constant for change in interfacial tension (K) values which experienced a maximum at CMC followed by drastic reduction. Mechanical properties of the uncompatibilised blends showed inferior properties. It was found that compatibilisation significantly improved the mechanical properties. A good correlation has been observed between the mechanical properties and morphological parameters. (c) 2006 Elsevier Ltd. All rights reserved.